Dear recipient of the FASA newsletter,
The recent economic downturn notwithstanding, franchising currently contributes 11.6% to the country’s GDP. In fact, every second of every day, somewhere across the world, someone will have a ‘franchise experience’. Regardless of whether they’re stopping off to pick up a take-out coffee, sending a parcel to a friend overseas, going to the gym, having a facial done; getting their car serviced, shop at a local supermarket or have dinner at a restaurant, chances are that most of the establishments they frequent are franchised.
You are receiving and reading the Franchise Association’s of South Africa’s newsletter because, in some way or another, you are involved with or interested in franchising.
As a Franchisor or Franchisee…. you are at the coalface of the franchise industry and having to face insurmountable challenges – given the current political upheaval, economic downgrade and general negativity that seems to be paralysing the country. Times are tough, no question about it. However, simply throwing your arms up in despair and giving up cannot be the correct response. FASA members and other players in the franchise sector need to show their mettle and uphold franchising’s ethos of tenacity and innovation.
I propose that we, the players in the franchise sector, need to be tougher and more street smart than ever before. We need to spot opportunities as they present themselves, market harder and negotiate better so that we not only stay in business to survive but thrive!
Innovation is nothing new to franchising. In fact, that’s what franchising is built on. If there is one sector that can turn disruption into opportunities it’s the franchising sector. Business will continue to get tougher in the foreseeable future, so an aggressive strategy must be adopted by all franchisors and their franchisees to stay ahead of the game. We need to welcome change. Being innovative and staying abreast of high-tech developments has become a crucial survival skill. Even though franchising is based on the duplication of tried and tested systems, we must remain flexible enough to act quickly. We simply must embrace new technology, introduce new trends and adapt to new patterns in consumer tastes.
As a member of the public interested in franchising…. we want you to know that franchising remains one of the safest ways to go into business ‘for yourself but not by yourself’ and has proved, time and again, to be a much lower risk investment than starting a new business. Statistics show that whereas 90% of new small businesses fail within two years of start-up, only 10% of franchised businesses fail. Add to that the fact that FASA’s recent franchisee satisfaction survey showed that 72% of franchisees are happy with their franchisors and 82% are optimistic about the future of their businesses and you have one of the soundest business methods to invest in – achieved through a network of over 700 franchise systems, over 35 000 franchise outlets contributing 11.6% to GDP.
If you are in the market to buy a franchise and with so many options available, prospective franchisees cannot risk buying into a failing system and should ensure that they choose franchises that are prepared to align themselves to a bona fida association like FASA. The first question a prospective franchisee should ask is, ‘Is your franchise accredited by the Franchise Association of South Africa?’
Franchisees, before they sign on the dotted line, need to ensure that they have thoroughly investigated the franchisor, confirmed that they are FASA accredited members by checking on the FASA website; spoken to existing franchisees and above all, made sure that they fully understand the terms of their agreement and what they are committing to. It is the responsibility of the franchisor to supply a franchisee with a full turn-key operation, give extensive training on how to operate the business and above all give ongoing support and guidance to help the franchisee make a success of his/her business.
FASA is holding its Franchise Week from the 29th June to the 2nd July at the Kyalami Race Track Exhibition & Convention with an expo, seminar, convention and awards all aimed to educate, entertain and showcase everything that’s good about franchising. We urge all franchisors to book a stand at the Franchise Business Festival and ensure that you put your business and your brand out there for all to see. Be part of the Franchise Convention to find out how to survive, thrive and innovate in these trying times and if you are a prospective franchisee, read about our events below and book your tickets now.
Tony Da Fonseca
FASA Chairman 2017/2018